The Commons defence select committee said the cost of the disastrous intervention in Iraq is up 16 per cent since November's estimate for the year and 42 per cent in Afghanistan.

The bill for the Afghanistan campaign in 2006-7 is now expected to be £770 million, compared to £540 million in the Government's winter estimates.

The UK taxpayer is due to spend £1 billion over the same period in Iraq, up from £860 million. The total - £1.77bn - works out at more than £4.8million a day.

The money being spent this year would pay for three new state-of-the-art hospitals, 32 schools, 24,000 affordable homes or 280,000 hip replacements.

Official figures suggest operations by British troops in the country are costing a staggering £23.5 million a day.

Total spending allocated for the Iraq war and subsequent peacekeeping operations since 2003 stands at £4.86 billion.

Around £1 billion is thought to have been spent on the British deployment in Afghanistan, though the Government has been reluctant to issue overall figures.

On top of military spending, Mr Blair announced late last year that he was sending announcing massive sums of British aid to Iraq, Afghanistan and Pakistan. He promised special funding to the three countries totalling £844 million.

Yesterday's Commons report found that some of the increased costs this year were due to expenses such as the new operational bonus for troops, which have been included in the figures for the first time.

However, even taking those extras into account, the forecast costs have risen by more than ten per cent for Iraq and almost a third for Afghanistan, according to the MPs.

Committee chairman James Arbuthnot said: 'We all want our forces fighting in Iraq and Afghanistan to be properly funded, but the Ministry of Defence needs to justify these cost increases and ensure that the money is well spent.'

The MPs said they could not understand the increasing costs in Iraq when Tony Blair had announced last month that around 1,600 troops were being withdrawn.

An additional 1,400 troops are being sent to bolster the Nato effort in Afghanistan, where the Taliban have been mounting a spring offensive.

An MoD spokesman said the increase was largely due to new equipment, particularly expensive armoured vehicles for use in Iraq and Afghanistan.

"The Department has always made clear that the Government is committed to providing all the resources that commanders need to achieve operational success and that this money is well spent," he added.

"We have to pay for people to have the best possible equipment. People are quick enough to say we need to provide that, they can't then beat us up when we do so."

Liberal Democrat Treasury spokesman Vince Cable said there was a "black hole without a bottom" in defence finances.

"Quite apart from the human cost, the continuing and open-ended occupation of Iraq is contributing to a large black hole in the Ministry of Defence's budget," he said.

"Many British troops are currently struggling without proper equipment because of the pressure on resources. Our armed forces are clearly overstretched."